How Does Real Estate Investing Work?

How Does Real Estate Investing Work?

Real estate investing works best with a strategy. In determining how you would like for real estate investing to work for you, it is important to first determine the results that you desire from real estate investing. Are you looking to build wealth or to create quick cash or both? Depending upon your desired results, you can choose a short term strategy, a long term strategy or a combination of the two.

How does real estate investing work to make quick cash?
Quick cash can be created with a short term real estate investing strategy, which includes quick turning or flipping property. Quick turning property (buying and selling right away) can provide big and quick cash if you buy right. Typically, the property is put under contract at a low price and then marketed at a higher price to include a profit. The property may be sold with or without improvements depending upon your strategy. Quick turn deals can easily generate from $2K to $30K plus depending upon the deal and whether it is a wholesale or retail quick turn.

Wholesale Quick Turn
Wholesale quick turns involve finding a deal below market value and quickly selling the deal at a wholesale price. By selling wholesale (below retail), you are giving your buyer, typically another investor, the opportunity to make a profit. If you negotiate the right deal upfront and turn the deal quickly, you can make good money this way.

Wholesaling is often a method of no, or little, money down deals. This is a way that real estate investors get around the need for financial backing for flipping houses. Let’s say that you find a motivated seller, who is willing to sell you their house at $100K. You put the property under contract with the seller for $100K and then find another buyer who wants the deal and is willing to pay $110K. You would then assign your contract with the seller to your buyer for a fee of $10K. Your buyer actually closes and purchases the property from the seller; and at closing you are paid a $10K assignment fee. An option is another method used to wholesale. You can put an option on a property and then sell your option to another investor for a profit. In fact, with assignments and options, you never even have to purchase the property to make money.

Retail Quick Turn
Retail quick turns involve finding a property well below market value and getting it market ready for retail sale. With retail quick turns, your target buyer is a home owner rather than an investor. You may purchase a property that needs a little work, a lot of work, or possibly needs no work at all because you purchased it from a motivated seller at a discount. Once the property is ready, you market and sell it at a retail price.

How does real estate investing work to build wealth?
Wealth is created through longer term real estate investing strategies, which involves buying and holding property. In this scenario, the investor buys a property and then rents it to a tenant or leases it to a tenant with the option to buy.

Renting
Renting involves finding a property, getting it in rent ready condition and marketing it for rent. The rental real estate investing strategy offers a number of profit opportunities. Cash flow is created when the monthly rental income exceeds the mortgage and other expenses. Long term wealth is created through appreciation of the property, the tenants paying down the mortgage, and tax advantages.

Imagine having 10 houses paid in full and rented for $1,000 a month for a monthly cash flow of $10,000. If the houses were only worth $100K each, you would have $1 million in assets plus a $10K per month cash flow before expenses. This financial position can be fairly easily accomplished in your own timeframe. Some people buy one or two houses per year and others buy a number of houses right away.

Lease Option
Lease options are created by offering a property for lease (usually for twelve months or more) with the option to buy. There are a number of profit centers with lease options to include income from the upfront option fee, monthly cash flow from the lease, profit from the sale when the option is exercised and tax advantages.

In conclusion, the answer to the question, “How does real estate investing work?” really depends on how you want real estate investing to work for you. Whether your goal is to build wealth, leave the 9-5, an early retirement, financial freedom, or quick cash, you can obtain it through real estate investing. There are numerous benefits to investing in real estate such as buying at a discount and creating instant equity, equity created through tenants paying down a mortgage, appreciation, cash flow, leverage and tax benefits. Determine your strategy –long term, short term or a combination of the two and make real estate investing work for you.

Nancy Spivey, known as The Real Estate Investor’s Resource, is an active investor, speaker and coach. Through her training and coaching programs, she helps new and experienced investors create profitability, productivity and prosperity. Nancy serves on the board of directors for the Georgia Real Estate Investors Association, the largest investor association in the U.S.

For a free copy of the eBook, The Science of Getting Rich and a list of Nancy’s Private Rolodex Resources, go to http://www.transformit.net/ezine.html and sign up for her free ezine, which is loaded with free tips, resources and tools that will help you create profit, productivity and prosperity in real estate investing!

© 2007 Nancy Spivey

Creating Success Begins With Your Thoughts

I do lots of things to keep my thoughts in the right place. One of those things is subscribe to this little newsletter that sends great thoughts into my email box.

Below is the email that I received today (and the details on how you can sign up if you want to do so).
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It's not the dazzling voice that makes a singer, Nancy. Nor clever stories that make a writer. And it's not piles of money that make a tycoon.

It's having a dream and wanting to live it so greatly, that one would rather move with it, and "fail," than succeed in another realm.

You so have what it takes -
The Universe




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Yo! Ho! Ho! "Thoughts Become Things * L I V E !" This 36 minute audio recording offers the cornerstone of the Adventurers Club philosophies... laced with stories, anecdotes, and humor.
Thoughts Become Things * L I V E !

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Thoughts become things... choose the good ones! ®
© www.tut.com ®

At which point, of course, Nancy, failure becomes impossible, joy becomes the measure of success, and fitting into the jeans you wore back-in-the-day, inevitable. Hubba, hubba.

On the Radio - How to Boost Your Business with a Coach

Left to Right: Me, Anne Lackey, Mark Lackey


Today, I was honored to be Mark & Anne Lackey's guest on their real estate radio show. We talked a bit about the market, a few deals and how coaching can boost your real estate investing business. If you missed the show and are interested in hearing a recording of our conversation today, just email me at nspivey@transformit.net!

Mark & Anne are not only radio show hosts but they are great assets to investors. They are agents and property managers offering turn key solutions for real estate investors. They will help you find property and then they can also manage it for you. The really neat thing about Mark & Ann (besides the fact that they are just great people) is that they are also active investors so they understand the needs of investors. You can reach them at Solid Source Property Management 404-886-8789.

Be sure to listen to the show. Along with Mark and Anne, my friend and host, Mary Ann Pine provide great information every Saturday from 10 AM - 11 AM on Love 860 AM.


Listen to the "Real Estate Investing Hour' every Saturday morning at 10-11:00 AM on LOVE 860 AM hosted by Mary Ann Pine, Mark & Ann Lackey. You can listen online at www.love860.com. Call in with you questions or comments at 404-355-8699.

What do you stand for?

Uncle Sam at the 4th of July parade in Atlanta.


Remember the old saying, “If you don't stand for something, you'll fall for anything”? As Americans, we are blessed with the freedom to stand for almost anything we believe in. The American flag stands as our symbol for freedom.

The colors in our flag represent the values that serve as the foundation of our country’s belief. Red represents valor, zeal and fervency. White represents hope, purity, cleanliness of life, and rectitude of conduct. Blue represents the color of heaven, reverence to God, loyalty, sincerity, justice and truth.

What about you?
What do you stand for? Personally? Professionally?
What values serve as your foundation?
What is your mission?
If you had your own flag what would it look like?
What would it stand for?

Deciding what you stand for in your real estate investing important because this is certainly an area where you don’t want to fall for just anything. You want to have a strategy, a direction, a plan – make a stand!

So, what do you stand for in…
Your real estate investing strategy?
Buying deals?
Working with sellers, buyers, vendors?
Managing your business?
Ethics?

July is Social Wellness Month. It is a month to improve one’s social and communication skills in order to be prepared in any situation. Having clarity on what you stand for in business and personally makes communication and negotiation a much easier process!

Make a pledge of allegiance to yourself - your hopes and dreams. No one believed the Colonists would defeat the mighty British Empire – except for the colonists. No one but Americans believed this country would survive. Each of us has within us the ability to transform our hopes and dreams into realities. Pledge to turn your hopes and dreams into plans and your plans into actions.

Let the spirit of our country and what it stands for be your example. Make a stand, make a pledge to yourself, design your own Bill of Rights, declare your independence and begin a transformed life! When you see the American flag let it be a reminder not only of what it stands for, but what you and your business stand for!

Have a Happy 4th of July!




My 4th was great fun this year as it was spent with some of my favorite people! The day started with celebrating freedom at the 4th of July parade in Atlanta and finishing the day at the fireworks at Lenox. From left to right, Taylor (my girl), Me, Eric (nephew), Karen (friend) & Hunter (nephew).

National REIA Mid Year Conference -Las Vegas

Viva Las Vegas!

I just returned from the NaREIA conference June 21st-24th in Las Vegas!



National REIA is a non-profit trade organization supporting and promoting local real estate investor associations. Each year a mid year leadership conference is held; and this year it was in Las Vegas. Presentations covered everthing from legislative issues and lobbying to public relations. This conference always offers great learning opportunities to grow our local association, GaREIA (http://www.gareia.org),
and enhance our member benefits. Meeting new people from all around the country, finding out about their associations, markets and more is great, too! Of course, just being in Vegas is also a ton of fun!

GaREIA at the Mid Year Conference
GaREIA had a great presence at the conference by Atlanta attendees. GaREIA was represented by Mike Helton, Marketing Director, and myself, PR & Communications Director. Atlanta vendors included national speakers, Pete Youngs and Don DeRosa, as well as, REI TV's Matt Goggin and Maggie Chamberlain.




From left to right: Mike Helton, Pete Youngs, Barb Youngs, Jim Shapiro, Matt Goggin, Maggie Chamberlain, Me & Don Derosa.








GaREIA presents PR & Building Community

Mike Helton & I

I was honored to have the opportunity to present at the conference. Mike Helton, our marketing director, and Mark Galey, our community outreach chair, were instrumental in helping me pull the presentation content together. Mike Helton shined in the presentation where he consistently chimed in with great ideas for the group. Thanks guys! We received great feedback on our work locally as an association and on the presentation.





Cathy Crowe-League from DFWREIN was our big winner.....
Talk about a great return on investment - Cathy won $1440.00 off of $17.00 that she dropped into a slot machine! Believe it or not, if you win over $1200 in Vegas you will be experiencing a little wait time before receiving your money; Cathy waited an hour and a half. You'll only be paid after an FBI and IRS check and being issued a 1099; and by the way, you can't gamble while you are waiting. Congratulations Cathy!

I won a whole 1250
I'm not much of a gambler. I won a whole twelve dollars and fifty cents.
Funny story - My favorite 5 year old, who is my friend's daughter (she's like mine), knew that I was going out of town to Las Vegas. Somewhere along the line, while I was gone, someone must have filled her in on gambling and Vegas. As soon as I returned, she was wanting to know how much money I won so I told her $12.50. For days, she was announcing to everyone, "Nanc' won $12.50 in Vegas". It was really cute but kind of embarrassing to have only won that little bit; but I figure, "Hey, atleast I didn't lose any money!" Another friend mentioned that maybe I should have just said 1250 and left it at that!

Vegas Views
Vegas is full of things to see. Here are just a couple of the sights that we saw while visiting.

Water show at the Bellagio


Gondala rides inside the Venetian


Overlooking the city from the top of the Stratosphere

Top 20 Metropolitan Statistical Areas in Appreciation

Mypropertywealth.com offers great investing information. I especially love statistics - visit their website for the Top 20 Metropolitan Statistical Areas in Appreciation!

http://www.mypropertywealth.com/IGOR3/itemDetail.php?itemId=1146

Atlanta Market Update

This month's Atlanta Market Update

http://fasthome.info/june%202007%20Newsletter/index_files/Page295.htm

is provided courtesy of Scotchie Cochran at Keller Williams. Scotchie is a real estate agent and investor. He loves working with investors! You can reach him at Scotchie@kw.com.